Data Processing System That Provides An Auction With Programmable Proxy Bids

ABSTRACT

In the context of computer-based auctions, innovations in proxy bids and auction formats are disclosed. In accordance with the illustrative embodiment, a bidder can program a data processing system to enter one or more bids by proxy. The capabilities offered by the data processing system include: determining one or more bid variables based, at least in part, on the identity of one or more bidders in an auction, or determining one or more bid variables based, at least in part, on the absence of one or more bidders from an auction, or determining one or more bid variables based, at least in part, on the bid variables in one or more other bids, or determining one or more bid variables based, at least in part, on the results of another auction, or determining one or more bid variables based, at least in part, on default values, or waiting a specific or random amount of time before entering a bid in behalf of a bidder, or any combination of these.

REFERENCE TO RELATED APPLICATIONS

This application is a divisional of U.S. patent application Ser. No.09/938,141, filed Aug. 23, 2001, now pending and allowed, which parentapplication claims the benefit of U.S. provisional application Ser. No.60/227,188, filed Aug. 23, 2000 and entitled “Intelligent Bids,”(Attorney Docket: 620-010us”), which is also incorporated by reference.

FIELD OF THE INVENTION

The present invention relates to electronic commerce in general, and,more particularly, to a data processing system for providingformula-based computerized auctions.

BACKGROUND OF THE INVENTION

Currently, there are many computer-based auction systems (e.g., eBay,CommerceOne, SupplierMarket, SupplierOne, MaterialNet, etc.) in whichbidders bid against each other in one or more rounds of bidding untilthe most advantageous bid is reached for a scope as defined by theauction solicitor. These auctions have worked well and have been quitesuccessful in driving prices down in reverse auctions and prices up inforward auctions.

The current interest in computer-based auctions has prompted innovationsin the format of auctions. For example, in the prior art, the biddingphase of an auction often lasted for only a few minutes, which is shortenough to continuously hold the attention of all of those interested inthe outcome of the auction. In contrast, auctions today, like those oneBay for example, typically last for days. Although a longer auction hasmany advantages, it is too long for any single bidder to continuouslymonitor the bidding. To alleviate this disadvantage, eBay, for example,enables a bidder to submit a “proxy bid.” A proxy bid is a direction tothe auctioneer (e.g., eBay's data processing system, etc.) or otherentity to prepare and enter one or more bids in behalf of the bidderunder terms and conditions specified by the bidder.

The proxy bid capabilities known in the prior art, however, have theirlimitations, and, therefore, the need exists for more advantageous kindsof proxy bids and auction formats.

SUMMARY OF THE INVENTION

The present invention provides innovations in proxy bidding and auctionformats that avoid some of the costs and disadvantages of proxy bids andauction formats in the prior art. In particular, proxy bids inaccordance with the illustrative embodiment offer more functionality andmore flexibility than proxy bids in the prior art.

In accordance with the illustrative embodiment, a bidder can program adata processing system to enter one or more bids by proxy. To this end,the capabilities offered by the data processing system include, but arenot limited to:

-   -   i. determining one or more bid variables based, at least in        part, on the identity of one or more bidders in an auction, or    -   ii. determining one or more bid variables based, at least in        part, on the absence of one or more bidders from an auction, or    -   iii. determining one or more bid variables based, at least in        part, on the bid variables in one or more other bids, or    -   iv. determining one or more bid variables based, at least in        part, on the results of another auction, or    -   v. determining one or more bid variables based, at least in        part, on default values, or    -   vi. determining one or more bid variables based, at least in        part, on the current time, or,    -   vii. determining one or more bid variables based, at least in        part, on an external condition or value, or    -   viii. determining one or more bid variables based, at least in        part, on a random (i.e., stochastic) function, or    -   ix. any combination of i, ii, iii, iv, v, vi, vii, and viii.        Furthermore, the illustrative embodiment enables the        partitioning of the scope of an auction into a plurality of        portions such that a bidder can bid on:    -   i. one or more portions of the scope, or    -   ii. the entire scope, or    -   iii. both i and ii.        When the scope of an auction is partitioned, the winner(s) of        the auction is determined in three steps. In the first step, a        candidate winning bid for the entire scope is determined. In the        second step, the candidate winning bids for each portion of the        scope is determined. In the third step, the winner of the        auction is determined by deciding which of:    -   i. the candidate winning bid for the entire scope, or    -   ii. the sum of the candidate winning bids for each portion of        the scope in each way that the scope is partitioned (provided        that there is a candidate winning bid for each portion of the        scope in the way that the scope is partitioned)        is more advantageous to the auction solicitor. Typically, an        auction solicitor will do better when it enables the scope of an        auction to be partitioned, and will do better still when it        partitions the scope in more, rather than fewer ways.

The illustrative embodiment comprises: entering, at a data processingsystem, a first bid into the auction from a first bidder; receiving, atthe data processing system, a bid package from a second bidder, whereinthe bid package directs the data processing system to determine a bidvariable based, at least in part, on the identity of the first bidder;and entering, at the data processing system, a second bid into theauction from the second bidder, wherein the second bid comprises the bidvariable as determined by the data processing system.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 depicts a schematic diagram of the illustrative embodiment of thepresent invention.

FIG. 2 depicts a block diagram of a data processing system in accordancewith the illustrative embodiment of the present invention.

FIG. 3 depicts a flowchart of the operation of the illustrativeembodiment of the present invention.

FIG. 4 depicts a flowchart of the tasks associated with defining anauction as depicted in FIG. 3.

FIG. 5 depicts a flowchart of the tasks associated with conducting anauction as depicted in FIG. 3.

FIG. 6 depicts a flowchart of the subtasks that compose subtask 503, asdepicted in FIG. 5.

FIG. 7 depicts a flowchart of the subtasks that compose subtask 504, asdepicted in FIG. 5.

DETAILED DESCRIPTION

FIG. 1 depicts a schematic diagram of the illustrative embodiment of thepresent invention 100 in which data processing system 101 conducts anauction (i.e., is the auctioneer of an auction) in behalf of auctionsolicitor 102 and between bidders 103-1 through 103-n, wherein n is apositive integer greater than zero. In accordance with the illustrativeembodiment, data processing system 101 is owned and operated by one ormore entities that are independent of auction solicitor 102 and bidders103-1 through 103-n. In some alternative embodiments of the presentinvention, however, data processing system 101 is:

-   -   i. owned, or    -   ii. operated, or    -   iii. owned and operated,        by    -   i. auction solicitor 102, or    -   ii. one or more of bidders 103-1 through 103-n, or    -   iii. both auction solicitor 102 and one or more of bidders 103-1        through 103-n.        In accordance with the illustrative embodiment, the owner or the        operator or the owner and the operator of data processing system        101 receives a fee in consideration for conducting an auction in        behalf of auction solicitor 102. In some embodiments of the        present invention, the fee is paid by auction solicitor 102. In        some alternative embodiments of the present invention, the fee        is paid by one or more of bidders 103-1 through 103-n.

In accordance with the illustrative embodiment, auction solicitor 102and bidders 103-1 through 103-n are capable of providing data to andreceiving data from data processing system 101 via:

-   -   1. data network 104 (e.g., the Internet, a private data network,        a local area network, a wireless data network, etc.), or    -   2. telephone network 105 (e.g., the Public Switched Telephone        Network, a wireless telephony network, etc.), or    -   3. courier 106 (e.g., Federal Express, the U.S. Mail,        publication in a newspaper, publication in a periodical, etc.),        or    -   4. in person by being co-located with local input/output device        202 (shown in FIG. 2) of data processing system 101, or    -   5. any combination of i, ii, iii, and iv.        It will be clear to those skilled in the art how to make and use        embodiments of the present invention in which auction solicitor        102 and bidders 103-1 through 103-n communicate with data        processing system 101 in person, through data network 104,        telephone network 105, and/or courier 106.

FIG. 2 depicts a block diagram of the salient components of dataprocessing system 101, which comprises computer 201, local input/outputdevice 202, data storage device 203, telephone center 204, telephonenetwork interface 205, and data network interface 206.

Computer 201 is a general-purpose processor that is capable ofperforming the functionality described below and with respect to FIGS. 3through 5. For example, computer 201 is capable of:

executing one or more programs that are stored in data storage device203;

storing the scope of an auction into data storage device 203, retrievingit from data storage device 203, and conducting an auction that isconsistent with that scope;

storing the format of an auction in data storage device 203, retrievingit from data storage device 203, and conducting an auction that isconsistent with that format;

storing the bids received for an auction in data storage device 203,retrieving them from data storage device 203, and evaluating theirrelative advantageousness to the auction solicitor;

storing the proxy bids for an auction in data storage device 203,retrieving them from data storage device 203, and executing them;

receiving data from and outputting data to local input/output device202;

receiving data from and outputting data to telephone center 204; and

receiving data from and outputting data to data network interface 206.

Local input/output device 202 comprises one or more machines (e.g.,terminals, scanners, printers, disk drives, displays, etc.) into whichdata from auction solicitor 102 and bidders 103-1 through 103-n can bereceived and from which data from data processing system 101 can beoutput to auction solicitor 102 and bidders 103-1 through 103-n.

Data storage device 203 is a non-volatile memory (e.g., a hard disk,flash memory, a tape drive, an optical device, etc.) for storing, forexample, the programs executed by computer 201 and the data input intocomputer 201 and generated by computer 201.

Data network interface 206 enables auction solicitor 102 and bidders103-1 through 103-n to communicate with data processing system 101 via adata network, such as the Internet. For example, data processing system101 can receive data and can output data via Web pages.

Auction solicitor 102 and bidders 103-1 through 103-n can communicatewith data processing system 101 via telephone, such as through atoll-free “800” number. To this end, telephone network interface 205advantageously comprises one or more telephones that are capable ofreceiving calls from and placing calls to auction solicitor 102 andbidders 103-1 through 103-n. Telephone network interface 205 can furthercomprise an automatic call distribution system, in well-known fashion,for routing incoming calls to the various telephones. Furthermore,telephone network interface 205 is advantageously capable of receivinginformation from auction solicitor 102 and bidders 103-1 through 103-nvia a touch-tone interface wherein the parties input information to thesystem by pushing the buttons on their telephones in response toquestions from an automated operator.

Telephone center 204 advantageously comprises one or more computerterminals that are operated by the personnel associated with telephonenetwork interface 205 such that an operator (either human or automated)can shuttle data between computer 201 and a bidder and auction solicitor102, who is in contact with data processing system 101 via telephonenetwork interface 205.

It will be clear to those skilled in the art how to make and usecomputer 201, local input/output device 202, data storage device 203,telephone center 204, telephone network interface 205, and data networkinterface 206.

Although data processing system 101 is depicted as only comprising onecomputer, one local input/output device, one data storage device, onetelephone center, one telephone network interface, and one data networkinterface, it will be clear to those skilled in the art that a dataprocessing system in accordance with the present invention can comprise:

-   -   i. one or more computers, or    -   ii. one or more local input/output devices, or    -   iii. one or more data storage devices, or    -   iv. one or more telephone centers, or    -   v. one or more telephone network interface, or    -   vi. one or more data network interfaces, or    -   vii. any combination of i, ii, iii, iv, v, vi, and vii.        whether any combination of computers, local input/output        devices, data storage devices, telephone centers, telephone        network interfaces, and data network interfaces are networked        (e.g., a wide area network, a local area network, etc.) or not        networked (e.g., a sneakernet, etc.), that cooperate to perform        the functionality described below and with respect to FIGS. 3        through 5. Furthermore, it will be clear to those skilled in the        art that the various components of data processing system 101        need not be co-located, but can separated by hundreds or        thousands of miles, which various components can be networked        (e.g., a wide area network, etc.) or not networked (e.g., a        sneakernet, etc.).

FIG. 3 depicts a flowchart of the operation of the illustrativeembodiment. For pedagogical purposes, the illustrative embodiment willbe described in general and then it will be described in conjunctionwith an illustrative example. In accordance with this specification, theoperation of the illustrative embodiment is described in terms of tasksand subtasks rather than steps because, as will be clear to thoseskilled in the art, some of the described tasks and subtasks can beperformed in a single step. Furthermore, the illustrative embodiment ismore easily understood when it is described in terms of its constituenttasks and subtasks than if it were described, formalistically, in termsof “steps.”

At task 301, the parameters of an auction are defined and promulgated.Although the auction solicitor typically initiates the need for theauction, and, therefore, the definition of the auction parameters, theauction solicitor might be assisted by consultants in the task ofdefining the auction parameters. In some alternative embodiments of thepresent invention, the operator of data processing system 101 can definesome or all of the auction parameters. Task 301 is described in detailbelow and with respect to FIG. 4.

At task 302, the auction is conducted in accordance with the parametersthat were defined and promulgated in task 301. In accordance with theillustrative embodiment, this includes, but is not limited to, theinitiation of the auction, the receipt of bid packages, the execution ofproxy bids, the entering of bids into the auction, and the determinationof the winning bid or bids. Task 302 is described in detail below andwith respect to FIGS. 5 through 7.

FIG. 4 depicts a flowchart of the subtasks that compose task 301.

At subtask 401, a scope for the auction is defined. For the purposes ofthis specification, the “scope” of an auction is defined as what theauction solicitor seeks to provide (e.g., information, money, services,goods, reality, intangible property, intellectual property, etc.) inconsideration for what the auction solicitor seeks to acquire (e.g.,information, money, services, goods, reality, intangible property,intellectual property, etc.) as a result of the auction.

For example, when an auction solicitor is a cinder block manufacturerwho seeks to sell one lot of 5,000 cinder blocks to one of severalmasons, the scope of the auction might be to provide 5,000 cinder blocksin consideration for an amount of money to be determined as part of theauction. As another example, when the auction solicitor is a taxi andlimousine company that seeks a 1-year service contract for its fleet,the scope of the auction might reasonably be to acquire 48 oil changesfor the vehicles in its fleet in a 12-month interval in considerationfor a number of taxi rides to be determined as part of the auction andan amount of money to be determined as part of the auction.

The scope of the auction advantageously, but not necessarily, definesthe mandatory and non-discretionary aspects of a qualified bid, when anyhave been indicated by auction solicitor 102 or data processing system101. In other words, a bid that does not satisfy all of the mandatoryand non-discretionary requirements that are indicated is void orvoidable at the auction solicitor's election. For example, for the taxiand limousine company that seeks the oil changes for its fleet, themandatory and non-discretionary aspects of the scope of the auctionmight be that the winning bidder must supply at least five quarts of10W-40 Mobil® One® oil and one Framm® oil filter in each of the 48specified oil changes.

The scope of the auction advantageously, but not necessarily, definesthe optional or discretionary aspects of a qualified bid. The optionalor discretionary aspects of a qualified bid are not essential elementsthat a bid must possess in order to be a qualified bid, but are variablefactors that affect how the various bids are ranked and the winningbid(s) is/are determined. For example, for the taxi and limousinecompany that seeks the oil changes for its fleet, there are two optionaland discretionary aspects of a qualified bid: (1) the number of taxirides to be provided by the taxi and limousine company to the winningbidder, and (2) the amount of money to be provided by the taxi andlimousine company to the winning bidder. In other words, because thetaxi and limousine company seeks to pay for the oil changes with acombination of money and services, each bid will comprise:

-   -   1. an indicium of the number of taxi rides, and    -   2. an indicium of the amount of money        that in combination the bidder is willing to accept in        consideration for the oil changes. For example, this enables a        first bidder to indicate that it is willing to accept 100 taxi        rides and no money in exchange for the oil changes, a second        bidder to indicate that it is willing to accept 25 taxi rides        and $400 in exchange for the oil changes, and a third bidder to        indicate that it is willing to accept no taxi rides and $825 in        exchange for the oil changes.

The mandatory and non-discretionary aspects of a bid and the optional ordiscretionary aspects of a bid can involve the same aspect. For example,when an auction solicitor desires to buy a truck, the scope of anauction might specify that a mandatory and non-discretionary aspect ofthe bid is a two-year warranty and an optional or discretionary aspectof the bid is a warranty for more than two years. In other words, oneaspect (e.g., the length of a warranty, etc.) can have both a mandatoryand non-discretionary aspect of the bid and an optional or discretionaryaspect of the bid so long as there is a clear demarcation of the linebetween the mandatory and non-discretionary aspect and the optional ordiscretionary aspect.

The scope of the auction advantageously, but not necessarily, definesthe mandatory and non-discretionary requirements of a qualified bidder,when any have been indicated by auction solicitor 102 or data processingsystem 101. In other words, a bid from a bidder who does not satisfy allof the mandatory and non-discretionary requirements that are indicatedis void or voidable at the auction solicitor's election. For example,when an auction solicitor is a corporation that seeks to provide dentalcare for its employees, the mandatory and non-discretionary aspects ofthe scope of the auction might reasonably be that the bidder, to be aqualified bidder, must hold a current and valid license to practicedentistry.

The scope of the auction advantageously, but not necessarily, definesthe optional or discretionary aspects of a qualified bidder. Theoptional or discretionary aspects of a qualified bid are not essentialelements that a bidder must possess in order to be a qualified bidder,but are factors that affect how the bid from the bidder is compared toother bids and how the winning bid(s) determined. Typically, theoptional or discretionary aspects of a qualified bidder are framed interms of a property of the bidder (e.g., how long the bidder has been inbusiness, whether the bidder and the auction solicitor have ever donebusiness before, the bidder's liquidity, etc.). For example, because thetaxi and limousine company seeks to enter into a long-term contract, thecompany might reasonably place a premium in contracting with a bidderwho is financially stable and who has been in business for a while. Inthis case, the scope of the auction might reasonably include as optionalor discretionary aspects of the bid: (1) an indicium of the financialstability of the bidder, and (2) an indicium of the length of time thatthe bidder has been in business.

The mandatory and non-discretionary aspects of a bidder and the optionalor discretionary aspects of a bidder can involve the same aspect. Forexample, when an auction solicitor desires to buy a truck, the scope ofan auction might specify that a mandatory and non-discretionary aspectof the bidder is that the bidder has been in business for at least twoyears and an optional or discretionary aspect of the bidder is how longit has been in business for more than two years.

In other words, one aspect (e.g., the length of time that the bidder hasbeen in business, etc.) can have both a mandatory and non-discretionaryaspect of the bidder and an optional or discretionary aspect of thebidder so long as there is a clear demarcation of the line between themandatory and non-discretionary aspect and the optional or discretionaryaspect.

The values of one or more optional or discretionary aspects of a bid orbidder or a bid and a bidder as submitted in a bid can affect theacceptable range of:

-   -   i. an optional or discretionary aspect of a bid, or    -   ii. an optional or discretionary aspect of a bidder, or    -   iii. a mandatory and nondiscretionary aspect of a bid, or    -   iv. a mandatory and nondiscretionary aspect of a bidder, or    -   v. and combination of i, ii, iii, and iv.        For example, if as part of a bid, a bidder seeks to carry X        dollars of cargo for an auction solicitor, a mandatory and        nondiscretionary aspect of the bidder might be that the bidder        currently carries at least X dollars in casualty insurance.

In summary, the scope of the auction informs a candidate bidder with acomplete and precise definition of:

-   -   i. what the auction solicitor seeks to acquire as a result of        the auction,    -   ii. what the auction solicitor seeks to provide as a result of        the auction,    -   iii. the mandatory and non-discretionary requirements of a        qualified bid,    -   iv. the optional or discretionary aspects of a qualified bid,    -   v. the mandatory and non-discretionary requirements of a        qualified bidder, and    -   vi. the optional or discretionary aspects of a qualified bidder.        In accordance with the illustrative embodiment, each bid        comprises one or more optional or discretionary aspects (of the        bid or of the bidder or of the bid and bidder) that in        combination determine the ordinal ranking of the bid with        respect to the other bids. As described below, the illustrative        embodiment comprises a mechanism for enabling the objective        comparison and ordinal ranking of bids that comprise two or more        optional or discretionary aspects of the bid or bidder or bid        and bidder.

At subtask 402, the format of the auction is established. For example,the format of an auction advantageously specifies, but is not limitedto:

-   -   i. when or under what circumstances the auction begins and ends,    -   ii. whether the auction is a sealed-bid auction or not,    -   iii. how many units or lots of the scope will be competed for,    -   iv. whether the scope is partitioned or not, and if so, how,    -   v. whether the auction comprises one or more rounds,    -   vi. how bids are made,    -   vii. what functionality can be provided by data processing        system 101 in preparing a proxy bid,    -   viii. how bids are evaluated and compared,    -   ix. whether the ranking of bids will be disclosed while new and        revised bids are still accepted, and    -   x. how the winning bid(s) is determined.        For example, the illustrative embodiment can be used with, for        example, one-sided auctions (e.g., the English auction format,        the Dutch auction format, the Vickery auction format, the        first-price, sealed-bid auction format, and their variants,        etc.) and double-sided auctions (e.g., the continuous double        auction format, the Double Dutch auction format, the Japanese        auction format, and their variants, etc.).

The illustrative embodiment can be used with sealed-bid auctions andnon-sealed-bid auctions. For the purposes of this specification, a“sealed-bid” auction is defined as an auction that comprises distinctbidding and resolution phases. In a typical sealed-bid auction, some orall of the contents of each bid submitted during the bidding phase arewithheld from the bidders until the resolution phase. A sealed-bidauction can comprise a single round or multiple rounds.

In accordance with the illustrative embodiment, the bids are comparedand ranked by plugging in the value of the optional or discretionaryaspects associated with each bid into a formula to produce a resultantbid and then by ranking the resultant bids based on their relativemagnitude. In accordance with the present specification, each of theoptional or discretionary aspects of a bid is called a “bid variable.”

In accordance with the illustrative embodiment, data processing system101 receives T bids in an auction, wherein T is a positive integergreater than zero. In accordance with the illustrative embodiment, eachbid, b_(k), wherein k=1 to T, comprises m bid variables, v_(1,k) throughv_(m,k). For the purposes of this specification, a “bid variable” isdefined as a discretionary or optional aspect of a bid or bidder. Theintegrity and public confidence in the auction process is enhanced whenthe bid variables are defined in such a way that their values can bedetermined or verified objectively and not subjectively.

A bid variable can be, for example:

-   -   a binary bid variable (e.g., the inclusion or absence of a        warranty in a bid, whether the bidder has or has not previously        supplied similar scope to the auction solicitor in the past,        whether the bidder has small disadvantaged business status,        etc.); or    -   an integer bid variable (e.g., the number of workers to be        assigned to a project, the number of computers to be tendered,        etc.); or    -   a continuous bid variable (e.g., the fuel mileage of a dump        truck, the length of time that a warranty will run, etc.).        A binary bid variable has two possible values, TRUE or FALSE. An        integer bid variable and a continuous bid variable can have no        bounds (i.e., range from negative infinite to positive        infinite), or can have a single bound (i.e., v₃>34), or can have        two bounds (i.e., 34<v₃<57), or more than two bounds (i.e.,        34<v₃<57 or v₃>135).

A bid variable can be a dimensioned or dimensionless quantity. Exampledimensioned bid variables that relate to physical properties include,but are not limited to:

-   -   i. mass (e.g., the mass of a projectile, etc.);    -   ii. weight (i.e., force) (e.g., the weight of a portable        computer, etc.);    -   iii. length (e.g., the length of an I-beam, the distance of the        bidder's premises to the job site, the perimeter of a field,        etc.);    -   iv. area (e.g., the area of a rug, etc.);    -   v. volume (e.g., the volume of a refrigerator, etc.);    -   vi. time (e.g., the length of time that a warranty will run, the        number of years of experience that the bidder has in some field,        when the bidder demands to be paid, etc.);    -   vii. electrical charge (e.g., the maximum number of coulombs        held in a capacitor, etc.);    -   viii. energy (e.g., the storage capacity of a battery, etc.);    -   ix. power (e.g., the horsepower of an engine, etc.);    -   x. pressure (e.g., the average pressure created by a pump, etc.)    -   xi. velocity (e.g., the maximum speed of an aircraft, etc.);    -   xii. acceleration (e.g., the effectiveness of a parachute,        etc.);    -   xiii. acidity (e.g., the pH of a dye, etc.);    -   xiv. a performance metric (e.g., the effectiveness of a drug in        obtaining results, etc.); and    -   xv. any combination of i, ii, iii, iv, v, vi, vii, viii, ix, x,        xi, xii, xiii, and xiv.

Example dimensioned bid variables that relate to finance include, butare not limited to:

-   -   i. money (e.g., the price for a hundred gallons of orange-juice,        etc.);    -   ii. interest (e.g., the rate at which past due invoices will be        charged interest, etc.);    -   iii. liquidity (e.g., the cash-to-asset ratio of the bidder,        etc.); and    -   iv. financial stability (e.g., the credit rating of the bidder,        etc.);

Example dimensioned bid variables that relate to a property of thebidder itself include, but are not limited to:

-   -   i. a satisfaction metric (e.g., how pleased other parties have        been with the past performance of the bidder as measured a        survey, etc.);    -   ii. a performance metric (e.g., the effectiveness of a bidder in        obtaining results, etc.);    -   iii. a financial stability metric (e.g., the credit rating of        the bidder, etc.);    -   iv. a delivery history metric (e.g., the percentage of packages        delivered by the bidder on time, etc.); and    -   v. a service metric (e.g., how often the bidder successfully        completes repairs in only one service call, etc.).

It will be clear to those skilled in the art how to define and utilizeother bid variables in embodiments of the present invention.Furthermore, it will be clear to those skilled in the art that thedegree of discretion that a bidder has to affect the value of aparticular bid variable can range from no discretion to absolutediscretion.

When data processing system 101 receives a bid, it produces a resultantbid, r_(k), for the bid, b_(k). In some alternative embodiments of thepresent invention, a bidder can submit the resultant bid, r_(k), withthe m bid variables, v₁ through v_(m), as part of the bid. In theseembodiments, data processing system 101 advantageously reproduces theresultant bid, r_(k), using its own parameters to verify the value ofthe resultant bid submitted.

In any case, the resultant bid, r_(k), is advantageously determined fromthe m bid variables, v_(1,k) through v_(m,k), and c bid weights, w₁through w_(c). For the purposes of this specification, a “bid formula”is defined as the manner in which a plurality of bid variables arecombined to produce a resultant bid. The general expression of the bidformula is depicted in Equation 1.r _(k) =f(v _(1,k) , v _(2,k) , . . . , v _(m,k) , w ₁ , w ₂ , . . . , w_(c))   (Eq. 1)In accordance with the illustrative embodiment, the resultant bid,r_(k), is dimensioned in “equivalent dollars” for ease of description,which indicates that each of the c bid weights, w₁ through w_(c), isdimensioned in units that when combined with the m bid variables,v_(1,k) through v_(m,k), produce an output dimensioned in equivalentdollars. In some alternative embodiments of the present invention, theresultant bid, r_(k), is dimensioned differently or is a dimensionlessquantity.

In accordance with the illustrative embodiment, each of the c bidweights is a constant. In some alternative embodiments of the presentinvention, one or more of the c bid weights is a linear or non-linearfunction of one or more of the bid variables (e.g., w₃=f(v₃), w₄=f(v₃,v₄), etc.). The function can be continuous (i.e., the derivative isdefined over the range of interest) or discontinuous (i.e., thederivative is not defined everywhere within the range of interest).

Furthermore, in accordance with the illustrative embodiment, the signsof the c bid weights are chosen so that positive attributes of a bid(e.g., the fuel efficiency of an engine, etc.) have a different polaritythan negative attributes of a bid (e.g., the amount of pollution createdby an engine, etc.) to enable bid variables that indicate positiveattributes of a bid to offset bid variables that indicate negativeattributes of the bid. In any case it will be clear to those skilled inthe art how to choose the respective values of the c bid weights, w₁through w_(c).

In accordance with the illustrative embodiment, the magnitude of theresultant bid, r_(k), is a linear function of the value of each of the mbid variables, v_(1,k) through v_(m,k,) as depicted in Equation 2.$\begin{matrix}{r_{k} = {{\sum\limits_{j = 1}^{m}{w_{j}v_{j,k}}} = {{w_{1}v_{1,k}} + {w_{2}v_{2,k}} + \cdots + {w_{m}v_{m,k}}}}} & \left( {{Eq}.\quad 2} \right)\end{matrix}$It will be clear to those skilled in the art how to make and use otherbid formulas for use with other embodiments of the present invention.For example, it will be clear to those skilled in the art how to definea bid formula in which the magnitude of the resultant bid, r_(k), is anonlinear function of the value of at least one of the m bid variables,v_(1,k) through v_(m,k). For example, Equation 3 depicts an example of abid formula in which the value of the resultant bid, r_(k), is afunction of 2 bid variables, v_(1,k) and v_(2,k), and 6 bid weights w₁through w₆. $\begin{matrix}{r_{k} = {{w_{1}v_{1,k}^{3}} + {w_{2}v_{1,k}^{2}} + {w_{3}{\mathbb{e}}^{v_{1,k}}} + \frac{1}{w_{4}v_{1,k}v_{2,k}} + {w_{5}{\sin\left( {w_{6}v_{2,k}} \right)}}}} & \left( {{Eq}.\quad 3} \right)\end{matrix}$

When the resultant bid, r_(k), for two or more bids are computed, theresultant bids are ranked based on their relative magnitude. When theauction has concluded, the bid associated with the resultant bid whosemagnitude is most advantageous to the auction solicitor is declared thewinning bid.

A key aspect of the illustrative embodiment pertaining to the format ofthe auction involves partitioning the scope of the auction into aplurality of portions along one or more “dimensions.” When the scope ofan auction is partitioned along one or more dimensions, a bidder can bidon:

-   -   i. the entire scope, or    -   ii. one or more portions of the scope in each dimension, or    -   iii. both i and ii.

In this case, the auction solicitor advantageously prescribes how thescope is partitioned and promulgates this information as part of theformat of the auction.

For example, the scope of an auction involving 100 office buildings inNew York, New Jersey, and Connecticut, comprises many dimensions alongwhich the scope can be partitioned. For example, one dimension is thestate in which the buildings are situated and, therefore, the portionscan be: a New York portion, a New Jersey portion, and a Connecticutportion. As another example, one dimension is the region in which thebuildings are situated and, therefore, the portions can be: a NewEngland portion (i.e., Connecticut) and a non-New England portion (i.e.,New York and New Jersey). As yet another example, one dimension is basedon the height of the buildings, and, therefore, the portions can be: ahigh-rise portion and a low-rise portion, or alternatively, buildings1-5 stories, buildings 6-13 stories, buildings 14-23 stories, andbuildings over 23 stories. As still another example, one dimension isthe number of employees in the buildings, and, therefore, the portionscan be: buildings with fewer than 400 employees and buildings with 400or more employees. From these examples, it is clearly shown that thereare many dimensions along which the scope of an auction can bepartitioned and many ways in which each dimension can be partitioned.

When the scope of an auction is partitioned along a dimension, the sumof the portions in that dimension must equal the entire scope of theauction. It will be clear to those skilled in the art how to determinethe dimensions along which the scope of an auction can be partitioned.Furthermore, it will be clear to those skilled in the art how topartition the scope in each dimension.

When the scope of an auction is partitioned, the winner(s) of theauction is determined in three steps. In the first step, a candidatewinning bid for the entire scope is determined, provided that there isat least one bid for the entire scope. The candidate winning bid for theentire scope is the bid for the entire scope that is most advantageousto the auction solicitor.

In the second step, the candidate winning bid for each portion of eachdimension is determined. If there is not at least one bid for eachportion in a given dimension, then all of the bids for all of theportions in that dimension are disqualified because no combination ofbids for portions in that dimension will equal the entire scope of theauction. The candidate winning bid for each portion is the bid for thatportion that is most advantageous to the auction solicitor.

In the third step, the winner of the auction is determined by decidingwhich of:

-   -   i. the candidate winning bid for the entire scope, or    -   ii. the sum of the candidate winning bids for each portion in        each dimension is more advantageous to the auction solicitor.

An example of how the scope of an auction is partitioned into multipledimensions is useful for pedagogical purposes. In accordance with theexample, the scope of an auction is defined as the purchase andinstallation of 90 air conditioners for 90 office buildings in Marylandand Virginia in consideration for cash. To simplify this example, thescope of this auction includes only one bid variable, cash, which isdimensioned in terms of money. It will be clear to those skilled in theart, however, after reading this specification, how to make and useembodiments of the present invention that conduct auctions withpartitioned scope and multiple bid variables.

To continue with the facts in the example, thirty-five of the buildingsneeding air conditioners are high-rises and require specializedequipment to install the air conditioners while the remainder of thebuildings require no such specialized equipment. Twenty-one of the highrise buildings are in Maryland and fourteen are in Virginia. There are25 low-rise buildings in Maryland and 30 in Virginia. The distributionof buildings between high-rise and low-rise and between Maryland andVirginia is depicted in Table 1. TABLE 1 Bids in IllustrativePartitioned Auction Scope Maryland Virginia Total High- 21 14 35 RiseLow-Rise 25 30 55 Total 46 44 90

Because the auction solicitor appreciates that aggregated bids might bemore advantageous than bids for the entire scope, the auction solicitorpartitions the scope of the auction along two dimensions. In the firstdimension, the scope of the auction is partitioned into a Marylandportion and a Virginia portion. In the second dimension, the scope ofthe auction is partitioned into a high-rise portion and a low-riseportion.

The auction receives 15 bids from 6 bidders, as shown in Table 1. TABLE2 Bids in Illustrative Partitioned Auction Bid- Entire Maryland VirginiaHigh-Rise Low-Rise Bid der Scope Portion Portion Portion Portion 1 1$925,000 2 1 $455,000 3 1 $450,000 4 1 $600,000 5 1 $275,000 6 2$945,000 7 2 $580,000 8 2 $325,000 9 3 $430,000 10 3 $590,000 11 4$965,000 12 4 $305,000 13 5 $575,000 14 6 $440,000 15 6 $295,000After the bids have been received, the winner or winners of the auctionare determined.

In the first step, a candidate winner for the entire scope isdetermined. As can be seen in Table 2, Bidder #1 (with Bid #1) has thecandidate winning bid for the entire scope with $925,000.

In the second step, a candidate winner for each portion is determined.

Because there is at least one bid in each portion of the scope aspartitioned into Maryland and Virginia portions, the candidate winnerfor the Maryland portion and the Virginia portion is determined. As canbe seen in Table 2, the candidate winner of the Maryland portion isBidder #3 (with Bid #9) with $430,000, and the candidate winner of theVirginia portion is Bidder #1 (with Bid #3) with $450,000.

Because there is at least one bid in each portion of the scope aspartitioned into high-rise and low-rise portions, the candidate winnerfor the high-rise portion and the low-rise portion is determined. As canbe seen in Table 2, the candidate winner of the high-rise portion isBidder #4 (with Bid #13) with $575,000 and the candidate winner of thelow-rise portion is Bidder #1 (with Bid #5) with $275,000.

In the third step, the winner of the auction is determined bydetermining which of:

-   -   i. the candidate winning bid for the entire scope (i.e.,        $925,000), or    -   ii. the sum of the candidate winning bids as partitioned into        the Maryland and Virginia portions (i.e.,        $430,000+$450,000=$880,000), or    -   iii. the sum of the candidate winning bids as partitioned into        high-rise and low-rise portions (i.e.,        $575,000+$275,000=$850,000)        is the most advantageous to the auction solicitor.

Because the sum of the candidate winning bids as partitioned intohigh-rise and low-rise portions is the most advantageous to the auctionsolicitor, Bidder #4 is awarded the high-rise portion of the auction andBidder #1 is awarded the low-rise portion of the auction. In thisexample, the auction solicitor saved $75,000 ($925,000−$850,000) bypartitioning the scope into a high-rise portion and a low-rise portionin contrast to proscribing the partitioning the auction.

In some alternative embodiments of the present invention, a bidder cansubmit a single bid for a subcombination of the portions of the scopeand in this case the subcombination is evaluated by comparing it to thesum of the best bids for the same portions as are in the subcombination.

With continuing reference to FIG. 4, it will be seen at subtask 403 thatthe scope of the auction and the format of the auction is promulgated tocandidate bidders. This can be achieved, illustratively, via:

-   -   1. data network 104 (e.g., the Internet, a private data network,        a local area network, a wireless data network, etc.), or    -   2. telephone network 105 (e.g., the Public Switched Telephone        Network, a wireless telephony network, etc.), or    -   3. courier 106 (e.g., Federal Express, the U.S. Mail,        publication in a newspaper, publication in a periodical, etc.),        or    -   4. in person by being co-located with local input/output device        202 (shown in FIG. 2) of data processing system 101, or    -   5. any combination of i, ii, iii, and iv.

FIG. 5 depicts a flowchart of the subtasks that compose task 302. Inaccordance with the illustrative embodiment of the present invention,the auction conducted pursuant to task 302 is a sealed-bid auction, and,therefore, has distinct bidding and resolution phases. In somealternative embodiments of the present invention, however, task 302 is anon-sealed bid auction with combined bidding and resolution phases.

At subtask 501, the auction parameters (e.g., the scope of the auction,the format of the auction, the bid formula, etc.), are received by dataprocessing system 101. This enables data processing system 101 toconduct the auction in accordance with the auction parameters.

At subtask 502, the auction is initiated. In accordance with theillustrative embodiment of the present invention, data processing system101 signals the beginning of the auction. When the specified auctionformat includes separate bidding and resolution phases, data processingsystem 101 advantageously signals the beginning and ending of eachphase. When the specified auction format includes multiple biddingrounds, data processing system 101 advantageously signals the beginningand ending of each round. In any case, it will be clear to those skilledin the art how to initiate the auction.

At subtask 503, the bidding phase of the auction is conducted. Inaccordance with the illustrative embodiment, the bidding phase comprisesreceiving bid packages, preparing bids, and entering bids into theauction, in addition to other subtasks. Subtask 503 is described indetail below and with respect to FIG. 6.

At subtask 504, the resolution phase of the auction is conducted. Inaccordance with the illustrative embodiment, the resolution phasecomprises publishing the contents of the bids in the auction,identifying the bidders, and identifying the winning bid and bidder, inaddition to other subtasks. Subtask 504 is described in detail below andwith respect to FIG. 7.

FIG. 6 depicts a flowchart of the subtasks that compose subtask 503, asdepicted in FIG. 5.

At subtask 601, T bid packages, bp_(k), wherein k=1 to T, are receivedby data processing system 101, wherein T is a positive integer greaterthan zero. In accordance with the illustrative embodiment, the bidpackages can be received by data processing system 101 concurrently orperiodically or sporadically during the auction, as specified by theformat of the auction.

In accordance with the illustrative embodiment, each bid package,bp_(k), is received by data processing system 101 via:

-   -   i. data network 104 (e.g., the Internet, a private data network,        a local area network, a wireless data network, etc.), or    -   ii. telephone network 105 (e.g., the Public Switched Telephone        Network, a wireless telephony network, etc.), or    -   iii. courier 106 (e.g., Federal Express, the U.S. Mail,        publication in a newspaper, publication in a periodical, etc.),        or    -   iv. in person by being co-located with local input/output device        202 (shown in FIG. 2) of data processing system 101, or    -   v. any combination of i, ii, iii, and iv.

In accordance with the illustrative embodiment, each bid package,bp_(k), comprises at least:

-   -   1. a direction to enter a bid, b_(k), into the auction;    -   2. a value for each of the m bid variables, v_(1,k) through        v_(m,k), associated with the bid;    -   3. one or more indicium that the bid satisfies the mandatory and        non-discretionary aspects of a qualified bid; and    -   4. one or more indicium that the bidder satisfies the mandatory        and non-discretionary aspects of a qualified bidder.

In accordance with the illustrative embodiment, the value of each of them bid variables, v_(1,k) through v_(m,k), is:

-   -   i. explicitly stated in the bid package; or    -   ii. implicitly stated in the bid package; or    -   iii. to be determined by data processing system 101 by reference        to a default value; or    -   iv. to be determined by data processing system 101 by reference        to publicly-available information; or    -   v. to be determined by data processing system 101 by reference        to private information (e.g., by reference to the contents of        another bid, etc.); or    -   vi. to be determined in accordance with any combination of i,        ii, iii, iv, and v.        For example, the first bid package from each bidder        advantageously explicitly states a value for each of the m bid        variables, v_(1,k) through v_(m,k), that are not determined by        default or incorporated by reference. Furthermore, subsequent        bid packages advantageously only explicitly state a value for        those bid variables whose value has changed from the last bid.        In this case, the bid variables whose value has not changed from        the previous bid can be reasonably deemed to be implicitly        stated in the bid package.

The auction format might indicate a default value for one or more of them bid variables, v_(1,k) through v_(m,k), such that a bid package neednot explicitly state a value for those bid variables unless the bidderdesires to override the default value.

Furthermore, in accordance with the illustrative embodiment, a biddercan program data processing system 101 to prepare and enter one or morebids in behalf of the bidder (i.e., by proxy). To this end, a biddersubmits a bid package, bp_(k), to data processing system 101, which bidpackage directs data processing system 101 to prepare and enter one ormore bids into an auction under certain specified terms and conditions.As part of preparing the bid, data processing system 101 can determinesome or all of the bid variables to be included in the bid. To this end,the capabilities offered by data processing system 101 include, but arenot limited to, determining whether or not to prepare and enter a bidbased, at least in part, on:

-   -   i. the identity of one or more bidders in auction,    -   ii. the absence of one or more bidders from an auction, or    -   iii. the bid variables in one or more other bids, or    -   iv. the current ranking of the bids, or    -   v. the results of another auction, or    -   vi. any combination of i, ii, iii, iv, and v.        Furthermore, the capabilities offered by data processing system        101 include, but are not limited to, determining one or more bid        variables based, at least in part, on:    -   i. the identity of one or more bidders in an auction, or    -   ii. the absence of one or more bidders from an auction, or    -   iii. the bid variables in one or more other bids, or    -   iv. the current ranking of the bids, or    -   v. the results of another auction, or    -   vi. default values, or    -   vii. any combination of i, ii, iii, iv, v, and vi.

The following discussion amplifies each of these capabilities in detail.

Determining one or more bid variables based, at least in part, on theidentity of one or more bidders in an auction. The illustrativeembodiment provides this capability because of the recognition that themere knowledge of the participation of a first bidder in an auctionmight affect a second bidder's decision-making in crafting its bid. Thisis true even though the second bidder has no knowledge whatsoever aboutthe first bidder's bid.

For example, if the second bidder knew that the first bidder submitted abid in a sealed-bid auction and the second bidder knew that the firstbidder normally won the auctions it entered, the knowledge of the firstbidder's participation in the auction might cause the second bidder tosubmit a more aggressive bid than it would otherwise. The capability isparticularly, although not exclusively, useful in sealed-bid auctions.

Determining one or more bid variables based, at least in part, on theabsence of one or more bidders from an auction. The illustrativeembodiment provides this capability because of the recognition that themere knowledge of the absence of a first bidder in an auction mightaffect a second bidder's decision-making in crafting its bid.

For example, if the second bidder knew that a first bidder had notsubmitted a bid in a sealed-bid auction and the second bidder knew thatthe first bidder normally won the auctions it entered, the knowledge ofthe first bidder's absence from the auction might cause the secondbidder to submit a less aggressive bid that it would otherwise.

For example, only manufacturers A and B can offer a 5-year warranty fortheir product, while all other manufacturers can only offer a 3-yearwarranty. Therefore, if manufacturer A does not enter a bid into theauction, B might only want to offer a 3-year warranty, even though itcan offer a 5-year warranty if it needs to.

The capability is particularly, although not exclusively, useful insealed-bid auctions.

Determining one or more bid variables based, at least in part, on thebid variables in one or more other bids. The illustrative embodimentprovides this capability because of the recognition that a first biddermight desire to have aspects of its bid track aspects of other bids. Forthe purposes of this specification, the “tracking” of a bid variabledoes not necessarily mean the outbidding or overtaking of another bidvariable.

For example, in some cases a first bidder might direct data processingsystem 101 to set a value for a bid variable that is more advantageousto the auction solicitor than the value of the same bid variable in asecond bidder's bid. In some other cases, the first bidder might directdata processing system 101 to set a value for a bid variable that isequally advantageous to the auction solicitor as the value of the samebid variable in the second bidder's bid. In yet some other cases, thefirst bidder might direct data processing system to set the value for abid variable that is less advantageous to the auction solicitor than thevalue of the same bid variable in the second bidder's bid.

This capability is particularly, although not exclusively, useful insealed-bid auctions. In accordance with the illustrative embodiment, thecontents of the bids in a sealed-bid auction are withheld from all ofthe entities outside of data processing system 101 (e.g., the auctionsolicitor, the bidders, etc.) by data processing system 101 until thebidding phase is over, but data processing system 101 itself can “see”and use the contents of sealed bids as the basis for determining bidvariables for other sealed bids.

Determining one or more bid variables based, at least in part, on theresults of another auction. The illustrative embodiment provides thiscapability because of the recognition that economic circumstances oftencompel a bidder to participate in a plurality of contemporaneousauctions such that the winning of too many auctions could be asdisastrous to the bidder as winning too few auctions.

For example, a building contractor might need between $80 million and$100 million worth of building contracts in the next year. If thecontractor receives substantially less than $80 million in contracts, itmight incur substantial loses. In contrast, if the contractor receivessubstantially more than $100 million in contracts, it might not have theresources to be able to manage all of the contracts properly, whichcould damage its reputation. Therefore, the contractor might endeavor toensure that it has between $80 million and $100 million worth ofbuilding contracts in the next year.

To continue with this example, suppose that the contractor already has$40 million in building contracts for the next year. Suppose furtherthat the contractor has decided to bid on two building contracts, eachfor $50 million, and that the auctions for the two contracts willoverlap in time. Clearly, the contractor would like to win one, but nottwo, contracts.

If the contractor wins the first auction, then it must withdraw from thesecond auction. In contrast, if the contractor loses the first auction,then it must be aggressive in the second auction. The illustrativeembodiment enables a bidder, therefore, to direct data processing system101 to determine one or more bid variables, based, at least in part, onthe results of another auction. This capability is equally useful insealed-bid and non-sealed-bid auctions.

Determining one or more bid variables based, at least in part, ondefault values. The illustrative embodiment provides this capabilitybecause of the recognition that default values for bid variables areconvenient for bidders, the auction solicitor, and the auctioneer (i.e.,data processing system 101).

For example, when the scope of the auction is defined, a default valuefor each optional and discretionary aspect of the bid is provided.Thereafter, each bid variable in a bid is assumed to have the defaultvalue for that bid variable unless the bid explicitly providesotherwise.

This capability is equally useful in sealed-bid and non-sealed-bidauctions.

At subtask 602 a bid is prepared in accordance with the directions asspecified in the bid package. In accordance with the illustrativeembodiment, each bid, b_(k), comprises at least:

-   -   i. an explicit value for each of the m bid variables, v_(1,k)        through v_(m,k);    -   ii. one or more indicium that the bid satisfies the mandatory        and non-discretionary aspects of a qualified bid; and    -   iii. one or more indicium that the bidder satisfies the        mandatory and non-discretionary aspects of a qualified bidder.

Regardless of whether each bid variable was explicitly stated in the bidpackage or implicitly stated in the bid package or determined by dataprocessing system 101 by reference to a default value or determined bydata processing system 101 by reference to publicly-availableinformation or determined by data processing system 101 by reference toprivate information or determined in accordance with any combination ofthese, data processing system 101 advantageously determines the explicitvalue for each bid variable, when necessary, and includes it with thebid. In other words, even when bid package does not comprise an explicitvalue for a bid variable, the bid associated with the bid package doesexplicitly comprise an explicit value for the bid variable. A bidpackage, bp_(k), might instruct data processing system 101 to determinethe value of one or more of the m bid variables, v_(1,k) throughv_(m,k), by reference to public or private information. For example,data processing system 101 might be instructed to determine the value ofa bid variable by reference to another bidder's bid (e.g., v_(k,1)equals v_(k-1,1) plus $50, etc.), other bid variables of bidder's bid,or the financial markets (e.g., v_(1,k) equals the S&P 500 index at10:00 AM today minus 25.00, etc.).

At subtask 603, data processing system 101 waits, if appropriate, aspecific or random amount of time before entering a bid in behalf of abidder. The illustrative embodiment provides this capability because ofthe recognition that a first bidder might desire to disguise the factthat its bids are being determined and entered by proxy.

For example, when a first bidder enters a bid into an auction andanother bid from a second bidder is immediately entered thereafter, thefirst bidder might suspect that the second bidder's bid is beingdetermined and entered by data processing system 101. This suspicion, iftrue, could affect the first bidder's decision-making in subsequent orrevised bids to the detriment of the second bidder.

Therefore, to alleviate this situation, the illustrative embodimentenables the second bidder to direct data processing system 101 to wait aspecific or random amount of time after the first bidder's bid has beenentered into the auction before entering the second bidder's bid intothe auction.

This capability is particularly, although not exclusively, useful innon-sealed-bid auctions.

At subtask 604, data processing system 101 enters the bid prepared insubtask 602 into the auction in behalf of the bidder.

At subtask 605, data processing system 101 determines whether each bidreceived in subtask 604 is a qualified bid by, for example, comparingthe one or more indicium that the bid satisfies the mandatory andnon-discretionary aspects of a qualified bid. When the bid does notqualify, it is void or voidable at the election of auction solicitor102. In accordance with the illustrative embodiment, data processingsystem 101 can, of its own initiative, retrieve publicly-availableinformation or private information and can determine, in whole or inpart, by reference to the retrieved information whether a bid receivedin subtask 604 is qualified.

At subtask 606, data processing system 101 determines whether eachbidder who submitted a bid that was received in subtask 604 is aqualified bidder by, for example, checking the one or more indicium thatthe bid satisfies the mandatory and non-discretionary aspects of aqualified bid against the mandatory and non-discretionary aspects of thebidder as defined in the scope of the auction. When the bidder does notqualify, that bidder's bids are void or voidable at the discretion ofauction solicitor 102. In accordance with the illustrative embodiment,data processing system 101 can, of its own initiative, retrievepublicly-available information or private information and can determine,in whole or in part, by reference to the retrieved information whether abidder who submitted a bid that was received in subtask 604 isqualified.

At subtask 607, data processing system 101 determines a resultant bid,r_(k), for the bid, b_(k), based on the bid formula received in subtask501 and on the m bid variables, v_(1,k) through v_(m,k), stated in bid,b_(k). In auctions that are partitioned, the subtask of determining theresultant bid also comprises determining the resultant bids for eachportion of the scope of the auction as well as for bids for the entirescope of the auction.

At subtask 608, data processing system 101 ranks the resultant bids,r_(k), for k=1 to T, by comparing the relative magnitude of theresultant bids and their relative advantageousness to auction solicitor102 as defined in the format of the auction. This is advantageously donefor both qualifying bids and unqualified bids and for bids from bothqualifying bidders and unqualified bidders. For unqualified bids andbids from unqualified bidders, data processing system 101 publishes witheach resultant bid an indicium that the resultant bid is unqualified oris a qualified bid from a unqualified bidder or both. This informs allof the bidders that that bid is void or voidable at the election ofauction solicitor 102, and, therefore, need not necessarily be overcometo win the auction. In other words, a bidder might not feel the need toovercome a candidate winning (but unqualified) bid to win the auctionwhen the bidder is confident that the auction solicitor will void thecandidate winning (but unqualified) bid.

In some alternative embodiments of the present invention, dataprocessing system 101 merely searches through the T resultant bids,without ranking them all, to find the resultant bid that is mostadvantageous to auction solicitor 102. Furthermore, in some alternativeembodiments of the present invention, unqualified bids and qualifiedbids from unqualified bidders are not published by data processingsystem 101. And still furthermore, in some alternative embodiments ofthe present invention, unqualified bids and qualified bids fromunqualified bidders are not considered by data processing system 101 atall (e.g., for the purposes of determining whether an auction should endwithout further bidding or should have another round of bidding, etc.).

It should be understood that each bid comprises multiple bid variablesnot merely to break a tie between two bids that have the same value forone bid variable, but so that bids that have no ties in any one bidvariables can be compared and ranked. That is not to say that two bidsin accordance with the present invention cannot have the same value fora bid variable, but that the values of all of the bid variables affectthe outcome of an auction. In some alternative embodiments of thepresent invention, however, no two bids have the same value for any onebid variable (i.e., v_(q,1) does not equal v_(q,2), for q=1 to m) in oneauction.

At subtask 609, data processing system 101 publishes the ranking for theresultant bids, r_(k), for k=1 to T, if appropriate in accordance withthe auction format. In accordance with the illustrative embodiment, theranking for the resultant bids are published for non-sealed bidauctions.

Furthermore, in accordance with the illustrative embodiment, the rankingfor the resultant bids are published for sealed-bid auctions during thebidding phase and before the resolution phase. The illustrativeembodiment provides this capability because of the recognition that itmakes sealed-bid auctions more competitive. This does not disclose thecontents of a sealed-bid to any party, but merely informs each bidderwhere its bid currently stands and enables each bidder to decide whetherit desires to submit a revised bid in the hope of improving its ranking.

At subtask 610, data processing system 101 determines if there isanother bid (from a previously received bid package) to be prepared andentered into the auction. Events that could cause another bid to beentered into the auction include, but are not limited to, the entry ofthe last bid into the auction, the results of another auction, or achange in publicly-available information (e.g., a change in interestrates, etc.). When data processing system 101 determines that anotherbid is to be prepared and entered into the auction, control passes tosubtask 602. Otherwise control passes to step 611.

At subtask 611, data processing system 101 determines if another bidpackage has been received and if the bidding phase of the auctionpermits the entry of another bid into the auction. When data processingsystem 101 determines that another bid package has been received and ifthe bidding phase of the auction permits the entry of another bid intothe auction, control passes to subtask 504. Control only passes tosubtask 504 when the bidding phase of the auction is over.

FIG. 7 depicts a flowchart of the subtasks that compose subtask 504, asdepicted in FIG. 5.

At subtask 701, data processing system 101 publishes each bid, b_(k),the value of the m bid variables, v_(1,k) through v_(m,k), the resultantbid, r_(k), for the bid, b_(k), the ordinal ranking of each resultantbid, r_(k), an indicium of whether the bid is qualified or not, and anindicium of whether the bidder who made the bid is qualified or not, toauction solicitor 102 and bidders 103-1 through 103-n via:

-   -   i. data network 104 (e.g., the Internet, a private data network,        a local area network, a wireless data network, etc.), or    -   ii. telephone network 105 (e.g., the Public Switched Telephone        Network, a wireless telephony network, etc.), or    -   iii. courier 106 (e.g., Federal Express, the U.S. Mail,        publication in a newspaper, publication in a periodical, etc.),        or    -   iv. in person by being co-located with local input/output device        202 (shown in FIG. 2) of data processing system 101, or    -   v. any combination of i, ii, iii, and iv.        In auction formats that have distinct bidding and resolution        phases, subtasks 505 and 506 are advantageously performed after        all of the bids have been received in subtask 503. In auction        formats that combine the bidding and resolution phases, subtasks        505 through 506 are advantageously performed after each bid is        received in subtask 503. In other words, in auction formats that        combine the bidding and resolution phases, subtasks 504 through        509 are performed after each bid is received.

It should be understood that subtasks 503 through 509 are performedconcurrently in auctions with combined bidding and resolution phases(e.g., sealed-bid auctions, etc.) and for each bid entered into theauction.

At subtask 702, data processing system 101 outputs an indicium of thewinning bid (when the auction format specifies that there is one winningbid) or bids (when the auction format specifies that there is more thanone winning bid) when the auction format indicates that the auction hasended. This information is advantageously distributed to auctionsolicitor 102 and bidders 103-1 through 103-n via:

-   -   i. data network 104 (e.g., the Internet, a private data network,        a local area network, a wireless data network, etc.), or    -   ii. telephone network 105 (e.g., the Public Switched Telephone        Network, a wireless telephony network, etc.), or    -   iii. courier 106 (e.g., Federal Express, the U.S. Mail,        publication in a newspaper, publication in a periodical, etc.),        or    -   iv. in person by being co-located with local input/output device        202 (shown in FIG. 2) of data processing system 101, or    -   v. any combination of i, ii, iii, and iv.

As indicated above, for pedagogical purposes the illustrative embodimentis now described in conjunction with an example. In accordance with theexample, an auction solicitor desires to purchase a truck and definesthe scope of the auction as follows:

The auction solicitor seeks to acquire a truck in consideration forcash.

The mandatory and non-discretionary requirements of a qualified bid are:

-   -   the truck must have a diesel engine,    -   the truck must have a minimum engine size of 400 horsepower,    -   the truck must have a minimum hauling capacity of 20 tons,    -   the truck must have a two-year warranty or longer,    -   the truck must have a maximum height of 13 feet, and    -   the purchase of the truck must be financed by the winning        bidder.

The optional or discretionary aspects of a qualified bid (i.e., some ofthe bid variables) are:

-   -   the engine size of the truck (in excess of 400 hp),    -   the hauling capacity of the truck (in excess of 20 tons),    -   the color of the truck,    -   the length of the warranty (in excess of 2 years),    -   the fuel efficiency of the truck,    -   the CO₂ emissions of the truck, and    -   the price of the truck.

The mandatory and non-discretionary requirements of a qualified bidderare:

-   -   the bidder must have sold trucks for at least three years, and    -   the bidder must have a repair facility within 50 miles of the        auction solicitor's location.

The optional or discretionary aspects of a qualified bidder (i.e., morebid variables) are:

-   -   the distance of the bidder's repair facility from the auction        solicitor's location, and    -   the interest rate that the bidder will charge the auction        solicitor in financing the sale of the truck.

In accordance with the illustrative auction, the auction solicitordefines the format of the auction as follows: The auction will be asingle-round, sealed-bid auction. The bidding phase will begin on Jun.30, 2002 at 3:00 PM EST and will end on Jul. 7, 2002 at 5:00 PM EST. Abid package can be submitted to data processing system 101 at any timeduring the bidding phase. A bidder can revise its current bid at anytime during the bidding phase. A revised bid must have a resultant bidthat is more advantageous to the auction solicitor than the current bid.Upon the entry of a bid into the auction, the bid will be evaluated (toensure that it is a qualified bid from a qualified bidder) and ranked.The current ranking of all pending bids will be published immediately(i.e., during the bidding phase and before the resolution phase). Theresolution phase of the auction will begin at Jul. 7, 2002 at 5:00 PMEST. There is only one unit being sought, and, therefore, there willonly be one winning bid. The bid variables are depicted in Table 3.TABLE 3 Bid Variables for the First Illustrative Auction Bid DefaultVariable Description Values V₁ the engine size of the truck (inhorsepower) 400 hp  V₂ the hauling capacity of the truck (in tons)  20tons V₃ the color of the truck (1 for a yellow truck; 0 for 1 any othercolor truck) V₄ the length of the warranty (in years) 2 V₅ the fuelefficiency of the truck (in miles per none gallon) V₆ the CO₂ emissionsof the truck (in pounds per none gallon of fuel) V₇ the price of thetruck (in dollars) none V₈ the distance of the bidder's repair facilityfrom the 50  auction solicitor's location (in miles) V₉ the interestrate that the bidder will charge the none auction solicitor in financingthe sale of the truck (in annualized basis points)

The auction solicitor has decided that the bid formula for bid, b_(k),is:r _(k) =w ₁(v _(1,k)−400)+w ₂(v _(2,k)−20)+w ₃ v _(3,k) +w ₄ v _(4,k) +w₅(v _(5,k)−2)+w ₆ v _(6,k) +w ₇ v _(7,k) +w ₈ v _(8,k) +w ₉ v _(9,k)  (Eq. 4)and that the winning bid will be the bid with the smallest resultant bidat the end of the auction.

The auction solicitor has decided that the nine bid variables have therelative value to the auction solicitor defined by the following bidweights: TABLE 4 Bid weights for the First Illustrative Auction BidWeight Comment W₁ = −$30 per horsepower (in excess of 400 hp) note thatV₁ ≧ 400 to be a qualified bid W₂ = −$150 per ton (in excess of 20 tons)note that V₂ ≧ 20 to be a qualified bid W₃ = −$500 W₄ = −$1000 per yearof warranty (in excess of note that V₄ ≧ 2 to be a qualified 2 years)bid W₅ = −$50 per mpg W₆ = +$10 per pound of CO₂ per gallon of fuel W₇ =+1 W₈ = +$20 per mile note that V₈ < 50 to be a qualified bid W₉ = +$5per annualized basis pointThe scope of the auction and the format of the auction are thenpromulgated to candidate bidders. Note that w₁, w₂, w₃, w₄, and w₅ arenegative because higher values of bid variables v₁, v₂, v₃, v₄, and v₅are more advantageous to the auction solicitor than lower values, andw₆, w₇, w₈, and w₉ are positive because lower values of bid variablesv₆, v₇, v₈, and v₉ are more advantageous to the auction solicitor thanhigher values.

When the auction commences, a first bidder, Dodge Trucks, submits afirst bid package, bp₁, to data processing system 101 directing dataprocessing system 101 to prepare and enter one bid with the followingbid variables: TABLE 5 Bid Variables for Bid 1 Bid Variable ValueV_(1,1) 405 horsepower V_(2,1) 25 tons V_(3,1) Blue = 0 V_(4,1) thedefault value (which data processing system 101 determines to be 2Years) V_(5,1) 16 mpg V_(6,1) 2 pounds of CO₂ per gallon of fuel V_(7,1)$258,000 V_(8,1) 28 miles V_(9,1) today's federal funds rate plus 25basis points (which data processing system 100 determines to be 550basis points)

The first bid package, bp₁, also directs data processing system 101 toprepare and enter into the auction one or more revised bids in behalf ofthe first bidder in the event that bids are received in the auction thatoutrank the first bidder's current bid. Furthermore, the first bidpackage, bp₁, also directs data processing system 101 to prepare andenter those bids in accordance with the following guidelines.

-   -   1. use the same values for each bid variable in the revised bid        as used in the previously entered bid, with the following        exceptions as listed in items 2 through 6;    -   2. if Mack Trucks enters the auction, decrease the value of bid        variable v₇ by $3000 and increase the value of bid variable v₄        to four years;    -   3. if Ford Trucks enters the auction, change the value of bid        variable v₃ to Yellow;    -   4. if the first bidder has won Auction #45,325 in data        processing system 101, increase the value of bid variable v₇ by        $250;    -   5. ensure that the value of the bid variable v₁ is within 25 hp        of that in the current leading bid; and    -   6. wait between 4 and 9 hours to enter the bid into the auction.        After the first bid has been received, T=1. After the first bid        and first bidder are determined to be qualified, data processing        system 101 uses the bid formula (Equation 4) and the bid weights        as defined in Table 4, to generate the resultant bid, r₁, which        equals: $259,630. Data processing system 101 then promulgates        the bid variables and resultant bid.

After the first bid was entered into the auction and before a second bidwas entered into the auction, the first bidder won Auction #45,325 indata processing system 101. This fact will be considered by dataprocessing system 101 in the even that it prepares another bid for thefirst bidder.

Subsequently, a second bid, b₂, is submitted by a second bidder, FordTrucks, to data processing system 101 with the following bid variables:TABLE 6 Bid Variables for Bid 2 Bid Variable Value V_(1,2) 425horsepower V_(2,2) 28 tons V_(3,2) Red = 0 V_(4,2) 2 Years V_(5,2) 14mpg V_(6,2) 2.5 pounds of CO₂ per gallon of fuel V_(7,2) $259,000V_(8,2) 16 miles V_(9,2) 560 basis points

After the second bid has been received, T=2. After the second bid andsecond bidder are determined to be qualified, data processing system 101uses the bid formula (Equation 4) and the bid weights as defined inTable 4, to generate the resultant bid, r₂, which equals: $259,495. Dataprocessing system 101 then ranks the two bids, with the smallerresultant bid being the more advantageous to the auction solicitor, and,therefore, the current leader. TABLE 7 Ranking of Resultant Bids AfterTwo Bids Have Been Submitted r₂ $259,495 r₁ $259,630

It is important to note that even though the price (i.e., bid variablev_(7,2)) of the truck in the second bid is $1000 greater than the price(i.e., bid variable v_(7,1)) of the truck in the first bid, the otheroptional and discretionary aspects of the bid indicate that the secondbid is of greater value to the auction solicitor than the first bid.This is why the second bid is the current leading bid.

Data processing system 101 then promulgates the ranking of the resultantbids and an indicium of the identity of the associated bidders, butwithholds the values of the bid variables and the resultant bids.

In response to the entry of the second bid into the auction and thedirections in the first bid package, bp₁, data processing system 100prepares a third bid, b₃, for entry into the auction in behalf of thefirst bidder. In accordance with the guidelines in the first bidpackage, bp₁, a third bid is entered into the auction with the followingbid variables: TABLE 8 Bid Variables for Bid 3 Bid Variable ValueV_(1,3) 405 horsepower V_(2,3) 25 tons V_(3,3) Yellow = 1 V_(4,3) 2Years V_(5,3) 16 mpg V_(6,3) 2 pounds of CO₂ per gallon of fuel V_(7,3)$258,250 V_(8,3) 28 miles V_(9,3) 550 basis pointsNote that the values of the bid variables in the third bid are the sameas those in the first bid with the exception of v₃ and v₇. Bid variablesv₃ and v₇ were changed because:

-   -   1. Ford Trucks entered the auction, and, therefore, data        processing system 101 changed the value of bid variable v₃ to        Yellow as it was instructed to do; and    -   2. the first bidder won Auction #45,325 in data processing        system 101, and, therefore, data processing system 101 increased        the value of bid variable v₇ by $250 as it was instructed to do.        Furthermore, it should be understood that the value of the bid        variable v₁ is within 25 hp of that in the current leading bid        (25 hp≧425 hp minus 405 hp).

Although the third bid was ready for entry into the auction momentsafter the second bid had been entered, data processing system 101 waited5 hours and 12 minutes before entering the third bid into the auctionfor the first bidder.

After the third bid has been received, T=3. Note that in the third bid,the first bidder has offered the truck in the color yellow and raisedthe price by $250. Data processing system 101 then uses the bid formula(Equation 4) and the bid weights as defined in Table 4, to generate theresultant bid, r₃, which equals: $259,380. Data processing system 101then ranks the three bids, with the smaller resultant bid being the mostadvantageous to the auction solicitor, and, therefore, the currentleader. TABLE 9 Ranking of Resultant Bids After Two Bids Have BeenSubmitted r₃ $259,380 r₂ $259,495 r₁ $259,630

From Table 9 it can be observed that the third bid overcame the secondbid, which was $135 lower that its first bid, by offering the truck inyellow and by raising the bid price by $250! In other words, someembodiments of the present invention enable a bidder to raise his pricefrom an earlier bid while changing other bid variables and to stillovercome a better bid.

Data processing system 101 then promulgates the ranking of the resultantbids.

When the bidding phase of the auction ends and the resolution phasebegins, data processing system 101 publishes all of the resultant bids,the bid variables, the final ranking of the bids, and the fact that bidb₃ is the winning bid.

It is to be understood that the above-described embodiments are merelyillustrative of the present invention and that many variations of theabove-described embodiments can be devised by those skilled in the artwithout departing from the scope of the invention. It is thereforeintended that such variations be included within the scope of thefollowing claims and their equivalents.

1. A method of conducting an auction in behalf of an auction solicitorand for a scope, the method comprising: entering, at the data processingsystem, a first plurality of bids into the auction, wherein each of thefirst plurality of bids is for a portion of the scope as partitioned ina first dimension, and wherein the first plurality of bids in aggregateis for all of the scope; entering, at the data processing system, asecond plurality of bids into the auction, wherein each of the secondplurality of bids is for a portion of the scope as partitioned in asecond dimension, and wherein the second plurality of bids in aggregateis for all of the scope; outputting from the data processing system anindicium of which of (i) the first plurality of bids and (ii) the secondplurality of bids is most advantageous to the auction solicitor.
 2. Themethod of claim 1 further comprising: entering, at a data processingsystem, a first bid into the auction, wherein the first bid is for allof the scope; and outputting from the data processing system an indiciumof which of (i) the first plurality of bids, (ii) the second pluralityof bids, and (iii) the first bid is most advantageous to the auctionsolicitor.
 3. The method of claim 1 wherein the first plurality of bidsis submitted by a first plurality of bidders that comprise a firstbidder and a second bidder; and wherein the second plurality of bids issubmitted by a second plurality of bidders that comprise a third bidderand a fourth bidder.
 4. The method of claim 1 wherein the firstplurality of bids is submitted by a first plurality of bidders thatcomprise a first bidder and a second bidder; and wherein the secondplurality of bids is submitted by a second plurality of bidders thatcomprise the second bidder and a third bidder.
 5. A method of conductinga sealed-bid auction in behalf of an auction solicitor, which sealed-bidauction comprises a bidding phase and a resolution phase, the methodcomprising: entering, at a data processing system and during the biddingphase, a first plurality of sealed bids into the auction, wherein eachof the first plurality of bids is for a portion of the scope aspartitioned in a first dimension and the first plurality of bids inaggregate is for all of the scope; entering, at the data processingsystem and during the bidding phase, a second plurality of sealed bidsinto the auction, wherein each of the second plurality of bids is for aportion of the scope as partitioned in a second dimension and the secondplurality of bids in aggregate is for all of the scope; and outputting,from the data processing system and before the resolution phase, theranking of the advantageousness of the first plurality of sealed bidsand the second plurality of sealed bids to the auction solicitor.
 6. Themethod of claim 5 further comprising entering, at the data processingsystem and during the bidding phase, a revised first sealed bid into thesealed-bid auction in behalf of the first bidder.
 7. The method of claim5 further comprising withholding, at the data processing system, thecontents of the second sealed bid from the first bidder until theresolution phase.
 8. The method of claim of 5 wherein the ranking isordinal.
 9. A method comprising: entering, at a data processing system,a first bid into a first auction in behalf of a first bidder; receiving,at the data processing system, a bid package that directs the dataprocessing system to prepare, after the first auction is completed, asecond bid for a second auction, wherein the second bid is based, atleast in part, on whether the first bidder has won the first auction ornot won the first auction; determining, at the data processing system,whether the first bidder has won the first auction or not won the firstauction; preparing, at the data processing system, the second bid based,at least in part, on whether the first bidder has won the first auctionor not won the first auction; entering, at the data processing system,the second bid into the second auction in behalf of the first bidder;and determining, at the data processing system, whether the first bidderhas won the second auction or not won the second auction.
 10. The methodof claim 9 wherein the first bid is for all of the scope of the firstauction; and wherein the second bid is for all of the scope of thesecond auction.
 11. The method of claim 9 wherein the first bid is for aportion of the scope of the first auction; and wherein the second bid isfor a portion of the scope of the second auction.
 12. The method ofclaim 9 wherein the first bid is for a portion of the scope of the firstauction; and wherein the second bid is for all of the scope of thesecond auction.
 13. The method of claim 9 wherein the first bid is forall of the scope of the first auction; and wherein the second bid is fora portion of the scope of the second auction.